The Best Online Payroll Services for 2024 (2024)

Everyone loves payday when money shows up in their bank account or they get a check. For payroll managers, though, payday can be the culmination of a lot of calculations and sweating of deadlines. Paying employees and contractors is the most complex part of small business accounting. You have to pay people 100% accurately, with the underlying math for taxes, benefits, and other types of withholding, correct to the penny.Finally, you have to submit payroll taxes and filings to the IRS and other tax agencies on time and for the correct amounts—or face penalties.

If you do payroll manually, the process can take hours. The best online payroll services do all that in minutes at a reasonable price—less than $100 per month for a business with five employees. We've reviewed the top options, so read on to find out which payroll service is best for you.

Deeper Dive: Our Top Tested Picks

• RELATED:
• Best Small Business Accounting Software
• Best Tax Software
• Best Personal Finance Software
• Best Mobile Payment Apps

Buying Guide: The Best Online Payroll Services for 2024

How We Test Online Payroll Services

We test and review online payroll services (whether you call them apps or services or even software is moot) every year to find the best ones and help you pick the one that's right for your business.

How do we choose and review the best payroll services? We look at the top payroll services that we deem best for small businesses processing payroll for 10 workers or fewer—that's our sweet spot, though these applications can handle many more employees. Then, we do hands on testing using sample payroll data. We also look at each online payroll service's history, reputation, and security practices.

Most small businesses have modest needs for human resources and benefits administration. Some of the payroll services we review go well beyond these basics and can work for larger organizations, but we focus on small businesses and their payroll needs.

What Is an Online Payroll Service?

Online payroll services are web-based tools that process your organization's payroll and distribute the correct amount of money to employees every payday. They calculate and submit payroll taxes and filings and track other withholdings, such as for health insurance and retirement plans. These services are compliant with standard HR guidelines and best practices.

(Credit: OnPay/PCMag)

How Much Does Online Payroll Cost for a Small Business?

Every payroll website we reviewed charges a base price, averaging around $40 per month, and a per-worker (employee or contractor) monthly charge of usually just a few dollars. Some, like Patriot Software and Gusto, have additional fees for some services.

Gusto is the most expensive. Its top tier, Premium, does not make its price public. You have to request a quote from the company. The version we reviewed, Gusto Plus, is $80 per month plus $12 per person per month. ADP Run and QuickBooks Payroll are not far behind. To be fair, these applications have more depth and flexibility than the less expensive ones do. Yet OnPay, one of our Editors’ Choice winners, gives you roughly comparable capabilities for about half the price.

What Is the Best Online Payroll Service for SMBs?

Based on our hands-on testing, the three top-rated payroll services currently are ADP Run, Gusto, and OnPay. Those three are the PCMag Editors' Choice winners. ADP Run is ideal for businesses that are poised to grow. Gusto is best for people who are new to running payroll. OnPay is best for larger SMBs and those in vertical industries.

Why Do You Need Payroll Software?

If you process payroll manually, you know it is a complex, exacting, and deadline-driven process. Your employees count on you to dispatch their paychecks and authorize direct deposits on scheduled paydays. They expect you to know how much to withhold for all the taxes they owe and the benefits you offer.

There's an enormous amount of detail to track, especially if you try to do it all on paper. Mistakes aren't tolerated well by anyone involved. Tax agencies can assess stiff fines and other penalties if payroll filings and taxes aren't received by the scheduled dates. Benefits providers can cut off services such as health insurance if you fall behind on payments.

Online payroll services help you process accurate and timely payday runs. They count on you to provide correct information about your payroll configuration and employees. And they won't let you complete a payroll if you're missing any required inputs. They make supporting data like employee profiles available while you're getting ready to pay your workers. They also offer special assistance and flexibility in areas like state registration and earnings types. Gusto can complete your state compliance requirements for you (for a fee), and OnPay is especially good at troubleshooting pay runs.

These services can save you an enormous amount of time. They minimize the frustration and headaches associated with payday. They promote goodwill with your employees because of their accuracy, flexibility, and timeliness. And they may even save you money you would otherwise pay in penalties.

What's the Cheapest Online Payroll Service?

The least expensive service is the Basic version of Patriot Software. It’s $17 per month plus $4 per worker per month (Time & Attendance and HR Software cost extra). But this version requires that you submit your payroll taxes and filings, a task that competitors take on themselves.

(Credit: Gusto/PCMag)

Initial Setup Is the Most Difficult Part

Though each payroll service has a unique user experience, they all share similar structures. They begin with the setup process, which is the most time-consuming and detail-oriented element of paying your staff.

Though the exact order varies, some services walk you through pages of questions in an orderly, step-by-step fashion. Others provide partial setup wizards and leave the rest to you. These setup wizards ask for information about your company, such as address and Employer Identification Number (EIN). You select your payroll schedule, which is usually weekly or biweekly, and you connect the application to your payroll bank account.

If your business offers employee benefits such as health insurance and retirement plans, you can create records that outline the cost to employees and any company contributions. The companies that provide payroll solutions like OnPay and ADP Run are themselves benefits brokers, while QuickBooks Payroll allows you to work with a third-party provider. The required amounts are then deducted during the payroll process and submitted to these providers.

You must also create thorough records for each employee, with details such as contact information, date of birth, Social Security number, salary or hourly pay rate, and number of allowances from form W-4.

(Credit: ADP/PCMag)

You need to enter any existing payroll history if you've compensated employees in the past. This process can be arduous and may require assistance from the site's onboarding specialists because absolute accuracy is critical. Some sites, like ADP Run, include tools to help automate this process.

If you offer additional payroll types like paid time off and sick pay, you can define your policies for accruing these benefits. The services then keep track of them for you. Bonuses and commissions can also be paid during a regular pay run, or you can issue them by creating an off-cycle payroll. Need to include garnishments like child support on paychecks? Online payroll services can do that, too. Most also offer custom pay types, so you can create your own, sometimes even when you're in the middle of a pay run.

Once you complete the setup, you generally can't return to the dedicated setup tools, so it's essential to get it right the first time. That said, every payroll service we tested has a comprehensive settings section where you can modify and add to the payroll information you've already entered.

Setup takes time and may require you to consult many resources. But in the end, it allows you to run your payrolls so much faster than you could with a manual system.

How Long Does Running Payroll Take?

Running payroll is the easy part. Though they differ in many ways, online payroll services function similarly during the actual pay run. When you launch a payroll, they show you a list of employees (and possibly contractors; you may run them separately) and their pay rates. You first check to make sure the pay period and pay date are correct. After that, you simply enter the number of hours worked, where applicable, in the appropriate pay type boxes (regular, overtime, vacation, and so on) or import them.

Every service has a way to import hours from timesheets or a time clock, which is more likely to be accurate than if you enter them manually. Sometimes, there’s an extra charge for this, like with ADP Run, which lets you turn a tablet into a time clock for punching in and out. Online payroll software also lets you allocate funds for other earnings types and reimbursem*nts on this same page.

After you enter all the necessary details, you preview your payroll. You can see each employee's gross and net pay, plus withholding for taxes and benefits, as well as any company contributions. The payroll service then shows you the total amount of money to be withdrawn from your bank account for direct deposits and taxes, as well as the exact date it will be debited. And it usually provides a link to checks that must be printed.

(Credit: Gusto/PCMag)

After you approve a payroll, your payroll service can generate additional tables or reports with the details of the pay run. And many allow you to edit, void, or cancel a payroll after it's been approved, but before a stated deadline.

If you have few employees or a very simple payroll, the process shouldn't take more than a few minutes. Depending on which service you use, you may be able to let payrolls process automatically (assuming there are no changes from the previous run). Some even offer same-day payroll and advances on paychecks.

Combined Payroll and Benefits Administration

In larger companies, payroll and benefits administration are usually handled by separate departments. In your small business, though, both of those responsibilities may land on your desk or that of another employee. There's so much overlap between payroll and HR that even if you're strictly running your payroll through an online payroll service, you'll still be doing HR tasks.

Most of the payroll services we review offer basic HR components, such as online W-4 and W-9 forms, new-hire reporting, document templates, and document storage. We look primarily at each site’s payroll processing capabilities, with additional HR support being considered a bonus.

Payroll On the Run

If you need to, you can run a payroll from your phone. It’s easier to do so on your desktop or laptop, but if you need to process payroll remotely, you can do so. You can view employee records and sometimes reports. Some payroll services are accessible through mobile browsers, and others through dedicated apps. They don’t all replicate absolutely every feature of the desktop version, but some of them do.

As mentioned, you can invite employees to create login credentials and enter some of their own personal information on their personal worker portal, either on the desktop or mobile app. In many cases, they can do much more than that, like punch in and out, request time off, view benefits, and see pay stubs.

Are Payroll Sites Safe?

The thought of using an online payroll service may leave you wondering whether it's safe to put all your business's payroll data online. All the online payroll services we review come from reputable companies with years or even decades of experience. They make every effort to keep your sensitive payroll data safe, as you can read about in their reviews.

Payroll Apps Have Many Benefits

Using an online payroll service has numerous advantages over running payroll manually, like greater accuracy and compliance, as mentioned earlier. They can save an enormous amount of time and frustration and provide comprehensive access to current and historical payroll runs. There are really no downsides to paying your employees and contractors in this fashion. So check out our reviews to see which one seems like a good fit for your small business.

For more small business tools, see our coverage of the best small business accounting software and the best CRM software.